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Given that support acknowledged the problem and stated they are working on it, and that the problem has been present for who knows how many months, I have requested an RMA for the device so I can return it to the store.
Unfortunately it is not working as advertised and Kobo acknowledge the problem. I highly doubt it will ever get fixed, especially since it is an older device (mine still in warranty) and the new line-up now coming out.
Sad but does one risk buying a new Kobo and potentially suffer future issues?
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